ACTION:Notice of Supplemental
Application for Construction and Operation Authority and Board Acceptance.

SUMMARY:Tongue River
Railroad Company, Inc. (TRRC) seeks a Board license under 49 U.S.C. § 10901
to construct and operate a rail line in southeast Montana.The purpose of the proposed line is to
transport low sulfur sub-bituminous coal from mine sites in the Otter Creek and
Ashland, Mont., area.TRRC had filed a revised
application for its construction authority on October 16, 2012, but modified
the project in a December 17, 2012 supplemental application that supersedes the
October 16 revised application. As
discussed in the supplemental application, TRRC’s preferred routing for the
proposed line would be the Colstrip Alignment between Colstrip, Mont., and
Ashland/Otter Creek, Mont., the southern portion of which was approved previously
by the Interstate Commerce Commission (ICC).

The
Board here gives notice that it is accepting the supplemental application.The Board has already established a service
list for this proceeding in a notice served on September 20, 2012, and a procedural
schedule for filings on the transportation merits in a decision served on
November 1, 2012.Under that schedule,
filings concerning whether the supplemental application meets the criteria of
49 U.S.C. § 10901 are due by March 1, 2013, and any reply comment from TRRC is
due by April 15, 2013.As indicated
below, any entity that is not currently on the service list that submits a filing
by March 1 will be added to the service list.

DATES:This notice is effective on January 13, 2013.
Pleadings must be filed in accordance with
the procedural schedule that the Board has established in this case.All filings must be served concurrently on
all parties of record and must be accompanied by a certificate of service.

ADDRESSES:Any filing submitted in this proceeding must
be submitted either via the Board’s e-filing format or in the traditional paper
format.Any person using e-filing should
attach a document and otherwise comply with the instructions found on the
Board’s website at “www.stb.dot.gov” at the “E-FILING” link.Any person submitting a filing in the
traditional paper format should send an original and 10 paper copies of the
filing (and also an electronic version) to:Surface Transportation Board, 395 E Street,
S.W., Washington, DC20423-0001.In addition, one copy of each filing in this
proceeding must be sent (and may be sent by e-mail only if service by e-mail is
acceptable to the recipient) to each of the following:(1) David H. Coburn, Steptoe & Johnson
LLP, 1330 Connecticut Ave., N.W., Washington, DC20036; and (2) any other person designated as
a party of record on this proceeding’s service list.

FOR FURTHER INFORMATION
CONTACT:Marc A. Lerner, (202) 245-0390.
[Assistance for the hearing impaired is available through the Federal
Information Relay Service (FIRS) at:1-800-877-8339].

SUPPLEMENTARY INFORMATION:In 1986, the ICC
authorized TRRC to construct an approximately 89-mile rail line between Miles
City, Mont., and Ashland and Otter Creek, Mont., in a proceeding known as Tongue
River I.[1]In 1996, the Board authorized TRRC to build a
contiguous 41-mile line from Ashland to Decker, Mont., in Tongue River II.[2]In 2007, the Board authorized TRRC to build
and operate the Western Alignment, a 17.3-mile alternative route for a portion
of the route already approved in Tongue River II, in a proceeding known
as Tongue River III.[3]

Petitions
for review of Tongue River II and Tongue River III were filed in
the United States Court of Appeals for the Ninth Circuit, and, in 2011, the
court affirmed in part, and reversed and remanded in part, those decisions for
additional Board review.N. Plains
Res. Council v. STB, 668 F.3d 1067 (9th Cir. 2011).The court’s decision implicitly required the
Board to revisit the environmental analysis for Tongue River I (as well
as Tongue River II and Tongue River III), because the agency had
conducted a cumulative impacts analysis for the entire line in Tongue River
III, and not just the portion of the line at issue in Tongue River III,
and had made the resulting mitigation conditions applicable to the entire line
in its Tongue River III decision.On April 19, 2012, TRRC informed the Board that it no longer intended to
build the Tongue River II and Tongue River III portions of the
railroad.

In a decision served on June 18, 2012,
the Board dismissed Tongue River II and Tongue River III and
reopened Tongue River I.[4]As explained in more detail in that decision,
the Board required TRRC to file a revised application that would present the its
current plans to build a rail line between Miles City and Ashland.In addition, the Board announced that it
would conduct a new environmental review, rather than a supplemental
environmental review based on the three prior environmental reviews conducted
in Tongue River I, Tongue River II, and Tongue River III.

In its revised application filed on
October 16, 2012, TRRC proposed to go forward with the Tongue River I
project, although in modified form.[5]After reviewing the submission, the
Board, in a decision served on November 1, 2012, clarified that the Board’s
review in thisproceeding would include
not only the new environmental review of the entire construction project, but
also an examination of the transportation merits supporting the entire Tongue
River I line.[6]The November 1 decision also directed TRRC to
supplement the revised application to provide a sufficient record for the
Board’s review, including additional evidence and argument in support of the
transportation merits.Finally, the
decision established a new procedural schedule for filings on the
transportation merits appropriate for this proceeding and required that TRRC
publish notices consistent with that decision.

On December 17, 2012, TRRC filed a
supplemental application intended to supersede the October 16 filing.TRRC explained that, in its October 16
application, it had proposed the construction of a line between Miles City,
Mont., and Ashland/Otter Creek, Mont., following a line similar to that
approved by the ICC in 1986.However,
TRRC now proposes a different routing, known as the Colstrip Alignment, as its
preferred alignment.[7]

According to TRRC, it would
construct the line, and the line would be operated solely by BNSF Railway
Company (BNSF), which owns a one-third interest in TRRC’s parent company,
Tongue River Holding Company, LLC.TRRC
states that, if selected as the preferred route, the 42-mile Colstrip Alignment
would provide rail transportation for low sulfur, sub-bituminous coal from
proposed mines in Rosebud and Powder River Counties, Mont., to an existing BNSF
line, and consequently to the rest of the national rail network.Specifically, the line would connect at the
north end with an existing and lightly used BNSF line known as the Colstrip
Subdivision, which currently connects with the Forsyth Subdivision at Nichols
Wye, a point approximately 6 miles west of Forsyth and approximately 50 miles
west of Miles City.At its southern end,
the Colstrip Alignment would have the same two termini south of Ashland as
those proposed by TRRC in its October 16 filing.Terminus Point 1 would, therefore, be at the
previously proposed Montco Mine location, and Terminus Point 2 would lie along
the Otter Creek drainage.TRRC claims
that the Colstrip Alignment offers the shortest, most cost effective, and least
environmentally impactful routing for the proposed line.

Comments on the transportation
aspects of TRRC’s supplemental application may be filed on or before March 1,
2013.Interested persons need not be on
the service list to file comments on TRRC’s supplemental application, but they
must serve a copy of their filing on TRRC and those on the service list.At that point, the commenting party will be
added to the service list.TRRC may file
a reply to the comments on or before April 15, 2013.

The Board’s environmental review for
this rail construction project is proceeding
separately from our review of its transportation merits. Because
the construction and operation of this project has the potential to result in
significant environmental impacts, the Board’s Office of Environmental Analysis
(OEA) has determined that the preparation of an Environmental Impact Statement
(EIS) is appropriate.OEA issued a
notice to stakeholders and the public on October 22, 2012, announcing its
intent to prepare the EIS and requesting comments on a draft scope of study.In November, OEA held scoping meetings in the
project area to assist in defining the range of issues and alternatives to be
considered in the EIS.Comments on the
scope of the EIS must be submitted to OEA by January 11, 2013.Subsequently, OEA will issue a final scope of
study for the EIS.Following the
completion of scoping, OEA will prepare and issue a Draft EIS for public review
and comment.The comments received will
be addressed in a Final EIS. The Draft
and Final EISs (including the public comments) will serve as the basis for
OEA’s recommendations to the Board regarding whether, from an environmental
perspective, TRRC’s supplemental application should be granted, granted with
environmental conditions, or denied.

The Board’s decision on TRRC’s supplemental
application then will take into consideration both the transportation merits
and the environmental impacts of constructing and operating the proposed line.

This decision will not significantly
affect either the quality of the human environment or the conservation of
energy resources.

Board decisions and notices are
available on our website at www.stb.dot.gov.

[5]Although the decision granting Tongue
River I authorized the construction of an 89-mile line, TRRC described the
line in its October 16 filing as being approximately 83 miles in length, based
on refinements that would straighten and shorten the alignment.